Black pepper prices which started moving from 30th July took a breather today in India which was immediately followed in other producing origins as the cheer leader India after the sprint started panting a little.
In less than 30 minutes the Indian Casino which trades pepper hit the bottom circuit level the enthusiasm of the bulls dropped suddenly.The market took pause in 2 stages of the rally at 138 and 145 but the expert opinions of new generation research analysts( some of them even has not seen pepper ) at major commodity broking houses continued to give buy calls giving higher targets for sept contracts. Since the demand was very weak from inside India and from overseas the spot prices did not move in the same fashion in which the future deliveries moved up.The investors were getting Indian rupees 8 to 10 per Kg as spread between spot and sept future delivery prices. Close to 1000 mt pepper suddenly got hedged in the exchange from stockiest and farmers who have been waiting for almost an year to sell and been expecting this levels.
In less than 30 minutes the Indian Casino which trades pepper hit the bottom circuit level the enthusiasm of the bulls dropped suddenly.The market took pause in 2 stages of the rally at 138 and 145 but the expert opinions of new generation research analysts( some of them even has not seen pepper ) at major commodity broking houses continued to give buy calls giving higher targets for sept contracts. Since the demand was very weak from inside India and from overseas the spot prices did not move in the same fashion in which the future deliveries moved up.The investors were getting Indian rupees 8 to 10 per Kg as spread between spot and sept future delivery prices. Close to 1000 mt pepper suddenly got hedged in the exchange from stockiest and farmers who have been waiting for almost an year to sell and been expecting this levels.
When India dropped usd 100 pmt in the licensed Casino without any drop in the spot market the drop in Vietnam was used 250 pmt on shipment prices and used 200 from Indonesia and usd 100 from brazil.The markets in all origins were moving up sharply without any Business worth mention its for sure that the markets are going to crack and break.There were more talk than actual business although an American broking house and a European broking house were adding fuel to the fire with presumed trades being reported.
This market is due for a correction of 10-%in the coming days itself as in India they are nearing the maturity and closing out of August contract as speculators dont take physical deliveries besides lack of export demand and indian domestic demand.
But one shouldnt take it lightly after the correction as we have seen prices zooming without any buying support other than the faq grades from Vietnam from Middle east and Africa. So if the actual demand which is expected to come after summer holidays of both Europe and America, where are these prices going to hit usd 1.75/lb or usd 2.00/lb??
Lets wait and watch patiently
Lets wait and watch patiently
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La Rive ..
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